Paying for a funeral ahead of time
A preneed funeral contract is an agreement to pay now for funeral goods and services to be provided later, often years later. Minnesota law places specific protections around that money. This page describes them plainly. It covers Minnesota preneed contracts with funeral providers; insurance-funded arrangements follow insurance rules and differ in some respects.
Where the money must go
Under Minnesota law, money you pay on a preneed funeral contract must be placed in trust. The funeral provider cannot simply keep it as revenue. The trust must be held at a bank, trust company, or similar institution, and the funds stay there until the funeral is provided or the contract is cancelled.
The provider must give you written notice of where the trust funds are deposited. Minnesota also requires an annual accounting: you are entitled to know where the money is and what it has earned.
Your right to cancel
A Minnesota preneed contract is generally revocable: you may cancel it and receive the trust money back, with the interest it earned. The exception is a contract made irrevocable for medical assistance eligibility purposes; those funds stay committed to funeral expenses, though you can usually transfer the contract to a different funeral provider.
If you move, change your wishes, or simply change your mind about the provider, ask in writing for cancellation or transfer. The provider does not have to agree to change the terms of a signed contract, but the trust money follows the law, not the provider's preference.
If the person has already died
Look for the preneed contract before paying for anything. If one exists, the funeral home named in it holds money in trust for these expenses. Bring the contract to the arrangement conference and ask for an accounting of the trust funds against the itemized statement. If the contract guaranteed prices, the items it covers should not cost more now, even if prices have risen since it was signed.
Questions or problems
The Minnesota Department of Health Mortuary Science Section, 651-201-4200, regulates preneed sellers and can take complaints. For contracts that will not be honored or trust money that cannot be accounted for, an attorney can help; the annual accounting and the written contract are the documents to gather first.